Tuesday, April 4, 2017

Tesla is now 2nd largest U.S. automaker

Tesla on Monday became the second-largest U.S. car maker in terms of market capitalization, displacing Ford, whose sales are lagging amid concerns about the ability of the U.S. market to keep growing.

Many major auto makers reported sharp U.S. sales declines in March compared to a year ago, but Tesla over the weekend said it saw a huge jump in sales in the first three months of the year.

That was enough to send the electric car maker's stock soaring Monday, even as investors punished major car brands for reporting lower-than-expected sales last month.

Tesla said it delivered 25,000 of its high-tech vehicles in the January-March period -- a 69 percent surge compared to the first three months of 2016 -- indicating it was on its way to meeting its goal of 50,000 vehicle deliveries by mid-2017.

Late last year, the company reported its first quarterly profit in more than three years, but then slipped back into unprofitability in the following quarter.

Investors rewarded the company, and stock movements Monday reshuffled the hierarchy among U.S. carmakers, with Tesla Motors overtaking Ford for the number two spot and closing the gap with GM, the biggest US automaker by market capitalization.

Near 1800 GMT, Tesla was up 5.5 percent to $293.89 for a market capitalization of $47.9 billion.

Ford, which fell 2.6 percent, has a market capitalization of $45.1 billion. GM fell 3.9 percent and has a market capitalization of $50.9 billion.

Tesla founder and CEO Elon Musk marked the occasion on Twitter with a dig at short sellers, investors who bet that the company's stock would decline.

"Stormy weather in Shortville," Musk tweeted.

Major brands struggle

For the industry as a whole, it may indeed be stormy weather.

Car companies appeared to be struggling to meet forecasts of an overall March sales increase of two percent year-over-year, according to auto data firm Edmunds.